This is going to be the biggest investment trend of this decade, in our opinion.
It can potentially grow bigger than all the newest tech trends like NFTs… or even crypto.
Yes, cryptos are here to stay. But you need to have a good reason to believe that they will continue growing as they did in the past. So far this year, bitcoin has been trading sideways.
In the meantime, commodities like gold are up. Gold and silver are up about 8% since the beginning of the year, while uranium has soared by 18%.
What does this performance tell us?
Several things…
A Commodity Boom Has Begun
Commodities are making some of their biggest moves in half a century.
From natural gas to coal, aluminum, and wheat, prices are soaring.
This is important, and, in our view, it could continue.
Why do we believe so?
There are several reasons.
First, and most obviously, the war in Ukraine continues.
Russia, which started the war, is a major exporter of oil, metals, and grains.
The West imposed sanctions on the country in response to its aggression.
Market participants have proactively imposed their own sanctions on Russia for ethical reasons.
And even more have decreased their exposure based on fear that if they continue trading with Russian corporations, then they themselves could be impacted by “secondary sanctions” from their allies.
As a result, a lot of Russian commodities like oil can’t reach the global market. This pushed the price of oil upwards of $116 per barrel.
And this situation isn’t going to change, in our view.
Even if the war stops today, the sanctions will remain in place. The situation has gone too far, and it will take time to unravel its consequences.
What does it mean?
It means that this year, commodities could, in our opinion, continue soaring.
The second reason why the commodities bull market is here to stay is the world’s move toward cleaner sources of energy.
Europe is turning away from Russian natural gas and oil.
All the world’s leading countries are committed to “cleaning up” their energy systems. It was true before the war in Ukraine, and it’s even more so now.
In our view, this creates perfect conditions for the clean energy sector to grow.
And one specific sector, in our view, could be more attractive than others.
Uranium Rally Could Potentially Continue for Years
As Europe and the rest of the world thinks about how to switch from oil (Russian or otherwise) to cleaner and safer energy sources, the uranium bull market will continue enjoying a massive catalyst.
Over the past 12 months, we have seen this trend developing.
The price of uranium is up 87%, while lithium is up 21%, and gold is up 12%.
Uranium has weathered the recent tech selloff.
Investors have finally realized that uranium is a clean and safe source of nuclear energy. And nuclear energy itself is by far the best available option, in our view.
The recent developments in Ukraine have only accelerated this shift.
We will not be surprised to see Germany and other European countries embark on “de-gasification” of their economies.
And it has already begun. Germany is considering whether to extend the lifespan of its nuclear reactors beyond 2022.
It’s one of the steps the country is taking to overcome its dependence on Russian energy supplies.
Bill Gates, one of the world’s richest individuals, said that nuclear energy is “ideal for dealing with climate change because it is the only carbon-free, scalable energy source that’s available 24 hours a day.”
One of the reasons why uranium has held up so well so far is the massive attitude shift that it’s undergoing. Put simply, the world likes nuclear energy again.
And we see no reasons why this sentiment is going to change.
As a result, we suggest that you put uranium and the public companies working in this space on your radar.
Thank you for your loyal readership,
The Financial Star team
